On January 2, 2018, All Good Company purchased 7,000 shares of the stock of Big Bad Company, and DID obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $15 per share, and represents a 30% ownership stake. Big Bad Company made $300,000 of net income in 2018, and paid dividends to All Good Company of $35,000 on December 15, 2018. Big Bad Company's stock was trading on the open market for $18 per share at the end of the year. Use this information to determine the book value of the investment that should be reported at year end by All Good Company. Round to nearest whole dollar.
Calculate ending balance of investment
| Initial investment (7000*15) | 105000 |
| Add: Net income (300000*30%) | 90000 |
| Less: Dividend | -35000 |
| Ending balance of investment | 160000 |
On January 2, 2018, All Good Company purchased 7,000 shares of the stock of Big Bad...
On January 2, 2018, All Good Company purchased 5,000 shares of the stock of Big Bad Company, and DID obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $13 per share, and represents a 30% ownership stake. Big Bad Company made $350,000 of net income in 2018, and paid dividends to All Good Company of $35,000 on December 15, 2018. Big Bad Company's stock was trading on the open market for $14 per...
On January 2, 2019, All Good Company purchased 7,000 shares of the stock of Big Bad Company, and DID NOT obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $11 per share, and represents a 10% ownership stake. Big Bad Company made $375,000 of net income in 2019, and paid dividends to All Good Company of $7,500 on December 15, 2019. On December 31, 2019, Big Bad Company's stock was trading on the open market for...
On January 2, 2019, All Good Company purchased 9,000 shares of the stock of Big Bad Company, and DID NOT obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $17 per share, and represents a 10% ownership stake. Big Bad Company made $475,000 of net income in 2019, and paid dividends to All Good Company of $10,000 on December 15, 2019. On December 31, 2019, Big Bad Company's stock was trading on the...
On January 2, 2018, Baltimore Company purchased 10,000 shares of the stock of Towson Company at $15 per share. Baltimore did NOT obtain significant influence as the purchase represents a 15% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $17,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $80,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased...
On January 2, 2018, Baltimore Company purchased 5,000 shares of the stock of Towson Company at $11 per share. Baltimore did NOT obtain significant influence as the purchase represents a 15% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $25,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $70,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased...
On January 2, 2018, Baltimore Company purchased 8,000 shares of the stock of Towson Company at $15 per share. Baltimore did NOT obtain significant influence as the purchase represents a 5% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $27,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $65,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased...
On January 2, 2018, Baltimore Company purchased 5,000 shares of the stock of Towson Company at $12 per share. Baltimore did NOT obtain significant influence as the purchase represents a 5% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $27,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $55,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased...
On January 2, 2017, Alpha Company purchased 10,000 shares of the stock of Zulu Company, and did not obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $10 per share, and represents a 10% ownership stake. Zulu Company made $25,000 of net income in 2017, and paid dividends of $10,000 on December 15, 2017. On December 31, 2017, Zulu Company's stock was trading on the open market for $12 per share at the...
On January 2, 2018, Baltimore Company purchased 20,000 shares of the stock of Towson Company at $12 per share. Baltimore obtained significant influence as the purchase represents a 35% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $27,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $50,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased to $18...
On January 2, 2018, Baltimore Company purchased 16,000 shares of the stock of Towson Company at $12 per share. Baltimore obtained significant influence as the purchase represents a 40% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $25,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $55,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased to $19...